In an affidavit filed with the Hawks in Limpopo, the Bolsheviks Party of South Africa (BPSA) calls for an immediate investigation into what it describes as “shameless wasteful expenditure” by the Lepelle-Nkumpi local municipality.
The municipality hired SC Mdhluli Attorneys in 2022 to help with registration at the Master’s Court for inclusion in the recovery process after losing R150 million in the collapsed VBS Mutual Bank scandal.
Documents obtained by Sunday World show that the law firm was initially compensated R280 000 for the one-time service.
However, in April of this year, Mdhluli Attorneys allegedly returned, demanding an additional R3.8-million, claiming it was 10% of the R38.4-million the municipality had recovered so far.
On September 20, BPSA secretary-general Seun Mogotji submitted an affidavit to Major-General Gopz Govender, the provincial head of the Hawks, describing the multimillion-rand payment as unjustifiable.
VBS scandal
“The extra millions of rands paid to Mdhluli Attorneys is questionable because the task of recovering the money lost to the VBS loot was carried out by the curator and his team,” Mogotji wrote.
He contended that other municipalities that suffered financial losses in the VBS scandal were able to recover a portion of their investments without the assistance of external legal practitioners.
“I submit that there was no service rendered by this law firm warranting payment of such an amount. And if any, such service was unnecessary and unwarranted,” the affidavit reads.
Mogotji accused the municipality of undermining the Public Finance Management Act and suggested the payment may point to corruption and collusion.
He urged the Hawks to investigate whether the law firm’s appointment followed due processes and whether any personal benefits accrued to municipal officials.
“It is unacceptable that taxpayers’ money is being used recklessly in this manner. Instead of prioritising service delivery, the municipality has chosen to enrich a law firm, knowing very well that there was a curator tasked with recovering the money,” Mogotji said.
Hawks asked to act
The BPSA further warned that accountability remains elusive in many Limpopo municipalities, most of which lost millions of rands in the VBS scandal.
“Our communities are living without proper roads, water, and electricity, yet millions are syphoned into questionable legal services.
“We demand the Hawks act without fear or favour and hold those responsible to account,” Mogotji said.
Lepelle-Nkumpi municipality, headquartered in Lebowakgomo, is one of several municipalities that invested heavily in VBS before its collapse in 2018.
Critics say the municipality’s continuous legal expenses are worsening its already fragile financial position.
Municipal spokesperson Lazzy Ledwaba told Sunday World that he would respond to questions after consulting the municipal manager.
However, at the time of publication, we had not received any response.
